Harford County Executive David Craig's plan to give bonuses to more than 5,400 county school employees was thrown into disarray after the teachers union failed to sign off on the agreement and Craig in turn vetoed the part of the legislation funding the school system's portion of the bonus funds.

By Tuesday, however, Craig and members of the Harford County Council were saying they would try to work out a solution to the situation which has thrown the county government into a battle with the leadership of the local teachers union over questions of how county funds should be spent and who has the right to determine it.

While Craig's veto means none of the $3.8 million slated for the school employees' bonuses can be transferred to the school system, some employees who aren't represented by the teachers union have already been paid the $625, the county administration said, because school officials believed the money coming from the county was a done deal.

Those employees who already received their bonuses will not be asked to pay it back, the school system's superintendent said at Monday night's Harford County Board of Education meeting. Craig likewise said Tuesday he would proffer legislation to reimburse the school system for those costs, estimated to be about $1.6 million.

Friday's veto does not affect 1,939 county government, sheriff's office and library system employees who are due to receive the $625 bonus before the end of the year.

Accuses union of 'hijacking' money

In a statement Friday morning, Craig said he issued a line item veto on the bill passed just four days earlier by the Harford County Council, halting the funding for the $625 bonus distribution for the school system's 5,443 employees.

Craig, a 34-year educator and former member of the Harford County Education Association, or HCEA, which represents 3,200 teachers and counselors, wrote he was upset by the union's "attempt to hijack this fund appropriation to support its case before the Maryland Public School Labor Relations Board."

The council had passed the bonus funding bill with amendments that Craig said allowed HCEA to use the money from the one-time payment as a way to reopen salary negotiations with the Harford County Board of Education and to try to turn the one-time gifts into part of the base salaries of teachers, something Craig did not want because it would obligate the county for additional money in future budgets.

Council members had also passed amendments that approved funding for only half of the $1,250 bonus for which Craig originally planned to spend $11.3 million from a $32 million budget surplus, explaining they wanted to review the second half when next year's budget picture became clearer. Craig had planned to distribute the bonus in equal installments this month and the next one in June, just before the end of the fiscal year.

The county executive said he regretted that he tried to reach out to all unions, and "one of them was not collaborative and cooperative. Unfortunately that has pulled down four other unions."

Year-long salary dispute

The dispute with the teachers union has its roots in the 2011-12 budget process that began late last year.

Last winter, the teachers union and other school employee unions negotiated for a raise package in the 2011-12 budget that would have given the employees a 3 percent cost of living increase and, in the case of the teachers, other salary enhancements. Craig and the county council, however, refused to provide funding for the pay increases. The other unions later reached accords with the school system, but the HCEA pressed its case under the state's two-year-old school employee binding arbitration law. The dispute has gone before the state board created by that law, and that board held a hearing on the matter Friday.

When Craig realized what one of the council's amendments might do with the teachers pay issue, he vetoed it, which had the impact of canceling all the money for the bonus that might have gone to the school system.

In a further complication, the school system had already forward funded the bonuses to employees represented by the four unions other than HCEA that had previously agreed to accept the payment. Most had already received the money.

"This is why support staff, nurses, secretaries and other non-teaching employees will have received the funds," Craig's spokesperson Ben Lloyd wrote in an e-mail Monday, clarifying again that no money has been transferred from the county to the Harford County Board of Education.

"The County Executive regrets that the HCEA leadership has misled teachers throughout this process, and that the simple act of extending a holiday bonus to teachers was turned into a political issue by the union," Lloyd wrote. "Mr. Craig, however, still hopes that he will be able to fund the one-time bonus that teachers deserve."

During Monday night's school board meeting, Superintendent Robert Tomback read a statement saying that "payroll had already been processed" for those employees not represented by the Harford County Education Association, or HCEA, with the understanding that this was a "forward-funded payment" and would be paid back by the county government's one-time stipend before the end of the year.

Tomback said the school system "will not seek repayment" on this bonus and will notify employees "immediately" once more details are available.

Craig said Tuesday he not only hopes to get the teachers the bonus eventually, but also he wants to definitely reimburse the school system for the money it paid the other 2,200 employees.

He said Tomback had been upfront about how the superintendent was going to handle paying his employees and had told Craig from the beginning he would distribute the money as the county executive wished.

"I doubt I would have paid anyone until I actually had the money," Craig added, "but they [Tomback and his staff] told us what they wanted to do and why."

'We were misled'

County council members and Craig seemed taken aback by HCEA's response to the bonus funding bill's passage last week.

On Friday, Billy Boniface, the county council president, said it was his understanding that the HCEA would sign the memorandum of understanding accepting the bonuses after the bill was passed as amended.

"I spoke to [Craig] last night [Thursday] and he said he was concerned about the fact that we were misled. I agreed with him," Boniface said.

"They reneged on what they said they would do," Boniface said of the teachers. "[Craig] was concerned and said that was unacceptable."

Boniface said the council can consider overriding the veto during its next legislative meeting on Jan. 3. Five votes would be needed to override the veto, and based on statements on the teachers union's website, that's what HCEA's leadership wants to the council to do. Before the veto controversy erupted, the council had already canceled a meeting scheduled for this week.

"I do support the county executive in that it was everybody's understanding that they would sign the MOU after we passed that legislation," Boniface said.

Origin of amendments

Some disagreement between council members and Craig arose Tuesday, when questions were raised by The Aegis about the origin of the amendments that led to the veto.

The changes are listed as being introduced by Boniface, along with four other council members, James McMahan, Joe Woods, Richard Slutzky and Mary Ann Lisanti. Both Boniface and Lisanti, however, said Craig actually requested the amendments

Boniface also said Craig was essentially vetoing his own bill.

Craig's spokesman Lloyd, however, dismissed any suggestion of differences in opinion between executive and county council.

"There's no disagreement between the administration and the Council on this. The administration and the Council were all on the same page with respect to the amendments, because that was what we were led to believe would allow teachers to get their bonuses," Lloyd wrote in an e-mail.

Contacted by telephone late Tuesday afternoon,Craig concurred and said the teachers had requested a change in the wording of the legislation from a "one-time bonus" to a "payment," which he said he mistakenly agreed to after receiving assurances from the council members and others it amounted to a technicality that would allow the teachers union to accept the bonus.

When he found out, however, that the wording change would be used as a pretext by the union to make its case before the labor relations board in its 2011 contract dispute, Craig said he took action and vetoed the entire money transfer to the school system, the only way he could act under the county charter and protect the payments going to the county government, sheriff's and library employees.

"We will definitely do this differently when we ask for the second half [of the bonus] next spring," Craig added, saying he may ask that the money for the school system be broken down by budget category and not placed in a single account, as happened with the bill he vetoed.

Lisanti's negotiations

Lisanti, who praised the amendments to the bill when they were being approved at the Dec. 13 council meeting, said Monday evening she had been in negotiations with HCEA President Randy Cerveny since the Dec. 6 public hearing on the bonus legislation.

Lisanti said Cerveny always had concerns about the union signing the memorandum of understanding with the school board to accept the one-time payment, which she called a fairly generic, three-bullet template.

"Mr. Cerveny expressed to me that he believed it [the MOU] would affect the impending suit before the labor relations board," Lisanti said, explaining she then had county attorneys confirm the county was not a party to that controversy.

"If in the fiscal year, if you give them more money, he thought it would confuse the labor relations board," she said about Cerveny and the bonus agreement.

The amendments that seemed to please Cerveny arrived at the last minute, just before the council meeting, Lisanti said.

"I thought we were moving forward. That's the basis of negotiation," she said of the amendments.

Lisanti "absolutely" believed Cerveny would sign the MOU after the bill was passed. Cerveny got up at one point and thanked the council for "all you've done to make sure all Harford educators benefit from the county surplus."

"That was our conversation from day one. My question has always been, 'What's it going to take to get you to sign the MOU?'" Lisanti said. "It certainly led everybody to believe that he [Cerveny] was going to… I feel that I was purposely misled – either purposely misled or somebody saw an opportunity to use a set of circumstances as a strategy to forward another agenda."

Never would have signed

On Monday, however, Cerveny questioned Craig's attempt to control the distribution of bonus money and said his organization would never have signed the MOU anyway, but instead wanted to negotiate with the school system on the salary issue.

"No county executive in the state of Maryland can condition funds to a school system. That is a Maryland statute," he said.

Asked why four other school unions apparently disagreed, Cerveny said he could not speak for the other unions.

He said HCEA may have been able to negotiate the bonus with the school system if the union had had more time after the council's vote Dec. 13.

"I am reaching out to the county council and county executive to see if I can get this resolved," he said about the veto situation.

"I have been getting all kinds of e-mails, many that are supportive and many that are vilifying me. Until this can be negotiated, there's nothing we can do," he said. "HCEA wants the teachers to get this money as much as they deserve it."

HCEA released a statement on its website explaining why the union wants to make the bonus money part of negotiations and accusing Craig of illegally trying to tell the school system how to spend its money.

"If we allow David Craig to do this it will take away all your rights to negotiate money in the future," the statement said. "The County Executive could claim every year that there is not enough money to fund wage increases. When a surplus is miraculously found every year he could give you a one-time bonus in lieu of steps and cost of living. This is what happened this year."

At Monday night's school board meeting, Cerveny did not address Craig's veto on the bonus, but commented on a school system e-mail sent out regarding negotiations for the bonus.

Cerveny said he was "concerned" with the wording in that e-mail that stated the HCEA had elected not to respond to the school system's offer to enter into negotiations. Cerveny said that the statement was not accurate.

He said that the morning of Dec. 14 he received an e-mail asking if the HCEA wanted to enter into negotiations regarding the bonus, but was unable to respond before the HCPS statement was released "less than four hours later." Cerveny said to do so in that period of time would mean that county teachers represented by the union would have had to take time off from work to meet and discuss the matter.

"I didn't realize your offer had a less than four hour time agreement," Cerveny said. He added that he hopes the "lines of communication can be improved" between the school system and group.

Labor talks go on

HCEA also released a statement on the results of Friday's meeting with the labor relations board.

Labor board chairman Seymour Strongin said Friday it may be better for the school board to return to the bargaining table and try to reach a settlement before the labor board issues a decision, according to the statement.

The labor board decision is expected to be issued in 30 to 45 days. Strongin, according to the union, told the school system that "any settlement must include an irrevocable commitment to fund the settlement."

Members of the Harford County Council grilled County Executive David Craig's legislative liaison Nancy Giorno and deputy treasurer Rick Pernas for almost an hour Tuesday on the proposed one-time, $1,250 bonus Craig wants to pay to all county employees.